View Full Version : OPEC output cut will reduce the 2017 budget deficit by 65%

12-07-2016, 08:29 PM

Affirmed the financial advisor to the prime minister, Haidar al-Abbadi, the Organization of Petroleum Exporting Countries decision (OPEC) to cut production, it will provide Iraq with nearly $ 14 billion a year, which means reducing the deficit budget next in 2017 by 65 percent, "and noted that it will revive the local economy and reduce the need to borrow internal and external, so the oil ministry revealed its commitment to reduce 200 thousand barrels per day of production under the resolution, but economists pointed out that the cooperation with the rest of OPEC producers can achieve a balance between supply and demand and improve the price.

He said the appearance of Mohammed Saleh, in an interview (long-Presse) that "the OPEC decision to cut production will reflect positively on the Iraqi economy by reducing the budget deficit," noting that "any dollar increase in the price of oil enters an additional annual return of $ billion, as well as reduce the need for new oil investments and maintain redeeming investments to maintain production capacity at the same level.

Financial advisor to the prime minister and added that "the decision means no need for expenses for a new increase in production," noting that it "is in two directions: first, to maintain the current production capacity and ensure that no retreat from current levels of oil wells, as well as exchange ceased to invest in new wells because of adherence production quota established by OPEC, which means the provision of between three to four billion dollars of investment plan for the next year in 2017 at the very least. " Saleh pointed out that "the outcome of the implementation of the resolution and the possible rise of crude prices by about ten dollars a barrel, means the provision of nearly ten billion dollars in annual revenues further, the other four as a result of lack of need for new oil investments," he returned to it, "thus means increased savings ratio and reduce the deficit budget in 2017 the next 65 percent. "

He stressed favor, that "the potential recovery of the Iraqi economy in the event of rising oil prices, also contributes to reducing internal and external borrowing ratio."

The price of Brent crude oil, has risen since Monday, by 19 percent, with the highest jump since last July 2015, above $ 55 a barrel, on the back of the Organization of Petroleum Exporting Countries decision (OPEC) cut its production ceiling by 1.2 million barrels per day. The budget deficit in 2017, which exceed percent trillion dinars, more than 21 trillion dinars.

For his part, he said a spokesman for the Oil Ministry, Assem Jihad, in an interview (long-Presse), "The Iraq of important producers in OPEC," noting that "the organization to cut production decision came by agreement between the Member States to address the decline in the price of crude and its repercussions on the economies crisis."

Jihad explained that "the decision to cut production will be implemented early next year, in 2017 and for a period of six months," pointing out that "ad hoc committees will monitor the market situation and identify the need to increase production in the event of stability after the expiry of that period."
The spokesman for the oil ministry, that "the agreement requires that the cut Arabia produced up to 460 thousand barrels per day, Iraq stands at 200 thousand barrels," pointing out that "many producers outside OPEC supported the decision by their willingness to reduce 600 thousand barrels per day, including Russia, which It pledged to cut about 300 thousand barrels of daily production. "

He continued jihad, "The decision is aimed at controlling the oil supply glut that the global market witnessed during the last term," he returned that "the implementation of the resolution will be supported by price increases and input-producing countries." And drew a spokesman for the Ministry of Oil that "Iraq will deal wisely with the subject to reduce the negative impacts and maximize the positive aspects, especially on the revenue," he "can not depart from the international consensus, especially since the decision was the result of tough negotiations."

In turn, said the economist Ahmed Rehn, in an interview (long-Presse) that "OPEC's decision to cut production will lead to reduce oversupply in the international market, especially after crossing the barrier of two million barrels per day," noting that "cooperation OPEC countries with producers outside can bring balance between supply and demand and lead to the result of improved price of oil. "

He said Rehn, "The global market has responded to the resolution by increasing the price of crude will reflect positively on the Iraqi economy," adding that "we we wished not covered by Iraq's decision because of the loss of a lot of opportunities for him for decades as a result of wars, sanctions and others."

He stressed the economic expert, that "Iraq if it had been the fastest in the development of his energies to the extractive was more of the resolution have benefited." The OPEC countries, announced in (the thirtieth of November 2016), its members agree on a production cut for the first time since 2008, indicating that the implementation of the agreement will be the start of next January 2017, for a period of six months.

It is hoped that OPEC members will meet with the rest of the producing countries outside the Organization, this weekend in the Austrian capital Vienna, to reach a final agreement on reducing production.